diff --git a/.changeset/six-pears-joke.md b/.changeset/six-pears-joke.md
new file mode 100644
index 0000000..36d0daf
--- /dev/null
+++ b/.changeset/six-pears-joke.md
@@ -0,0 +1,5 @@
+---
+"create-better-t-stack": patch
+---
+
+Allow disabling telemetry with BTS_TELEMETRY_DISABLED=1
diff --git a/.github/workflows/release.yaml b/.github/workflows/release.yaml
index e745b5b..1a0525e 100644
--- a/.github/workflows/release.yaml
+++ b/.github/workflows/release.yaml
@@ -36,7 +36,7 @@ jobs:
         with:
           publish: bun run publish-packages
         env:
-          TELEMETRY: "true"
+          BTS_TELEMETRY: 1
           GITHUB_TOKEN: ${{ secrets.GITHUB_TOKEN }}
           NPM_TOKEN: ${{ secrets.NPM_TOKEN }}
           POSTHOG_API_KEY: ${{ secrets.POSTHOG_API_KEY }}
diff --git a/apps/cli/README.md b/apps/cli/README.md
index 4131859..7b48884 100644
--- a/apps/cli/README.md
+++ b/apps/cli/README.md
@@ -66,6 +66,32 @@ Options:
   -h, --help                      Display help
 ```
 
+## Telemetry
+
+This CLI collects anonymous usage data to help improve the tool. The data collected includes:
+- Configuration options selected
+- CLI version
+- Node.js version
+- Platform (OS)
+
+**Telemetry is enabled by default in published versions** to help us understand usage patterns and improve the tool.
+
+### Disabling Telemetry
+
+You can disable telemetry by setting the `BTS_TELEMETRY` environment variable:
+
+```bash
+# Disable telemetry for a single run
+BTS_TELEMETRY=0 npx create-better-t-stack my-app
+
+# Disable telemetry globally in your shell profile (.bashrc, .zshrc, etc.)
+export BTS_TELEMETRY=0
+```
+
+### Development
+
+During development, telemetry is automatically disabled when `NODE_ENV=development`.
+
 ## Examples
 
 Create a project with default configuration:
diff --git a/apps/cli/src/utils/analytics.ts b/apps/cli/src/utils/analytics.ts
index a86c68b..e515e43 100644
--- a/apps/cli/src/utils/analytics.ts
+++ b/apps/cli/src/utils/analytics.ts
@@ -1,6 +1,7 @@
 import { PostHog } from "posthog-node";
 import type { ProjectConfig } from "../types";
 import { getLatestCLIVersion } from "./get-latest-cli-version";
+import { isTelemetryEnabled } from "./telemetry";
 
 const POSTHOG_API_KEY = process.env.POSTHOG_API_KEY || "";
 const POSTHOG_HOST = process.env.POSTHOG_HOST;
@@ -14,7 +15,7 @@ export async function trackProjectCreation(
 		flushInterval: 0,
 		privacyMode: true,
 		disableGeoip: true,
-		disabled: process.env.TELEMETRY !== "true",
+		disabled: !isTelemetryEnabled(),
 	});
 
 	try {
diff --git a/apps/cli/src/utils/telemetry.ts b/apps/cli/src/utils/telemetry.ts
new file mode 100644
index 0000000..2be808e
--- /dev/null
+++ b/apps/cli/src/utils/telemetry.ts
@@ -0,0 +1,34 @@
+/**
+ * Utility function to determine if telemetry should be enabled.
+ *
+ * Telemetry is enabled by default in production, but can be disabled by:
+ * - Setting BTS_TELEMETRY=0 or BTS_TELEMETRY=false
+ * - Running in development environment (NODE_ENV=development)
+ */
+export function isTelemetryEnabled(): boolean {
+	// If user explicitly disabled telemetry
+	if (
+		process.env.BTS_TELEMETRY === "0" ||
+		process.env.BTS_TELEMETRY === "false"
+	) {
+		return false;
+	}
+
+	// If user explicitly enabled telemetry
+	if (
+		process.env.BTS_TELEMETRY === "1" ||
+		process.env.BTS_TELEMETRY === "true"
+	) {
+		return true;
+	}
+
+	if (
+		process.env.BTS_TELEMETRY_DISABLED === "1" ||
+		process.env.BTS_TELEMETRY_DISABLED === "true"
+	) {
+		return false;
+	}
+
+	// Default to enabled in production
+	return true;
+}
diff --git a/apps/cli/tsdown.config.ts b/apps/cli/tsdown.config.ts
index dbbee7f..c4210ce 100644
--- a/apps/cli/tsdown.config.ts
+++ b/apps/cli/tsdown.config.ts
@@ -10,8 +10,8 @@ export default defineConfig({
 		banner: "#!/usr/bin/env node",
 	},
 	env: {
-		POSTHOG_API_KEY: process.env.POSTHOG_API_KEY || "lol",
-		POSTHOG_HOST: process.env.POSTHOG_HOST || "lool",
-		TELEMETRY: process.env.TELEMETRY || "false", // wierd trick i know
+		POSTHOG_API_KEY: process.env.POSTHOG_API_KEY || "random",
+		POSTHOG_HOST: process.env.POSTHOG_HOST || "random",
+		BTS_TELEMETRY: process.env.BTS_TELEMETRY || "0",
 	},
 });